Binary options do not have a very good reputation for trading, as many people end up getting scammed or lose a lot of money. In addition, many countries have banned their citizens from trading in binary options due to high risks and fear of identity theft.
In this article, we will specifically discuss binary options legal in New Zealand or not? We will discuss all the rules and regulations that the citizens need to follow for a safe investment and ethical investing.
Binary options are not that easy to trade with. Thus the government advises its citizens to trade only if they are sure about all the necessities from the broker. In addition, the regulations highlight the license one should look for from the broker and basic things to look for on online platforms to save oneself from scams.
To start experimenting and learning the basics of trading, you can sign-up on Quotex and start trading without losing any money.
Binary options are short-term trading contracts with limited risks. If you are a new trader, then start experimenting with binary options for a safer side. Binary options have various names, ‘all or nothing, ‘fixed returns’, and ‘digital options’
One can make good profits by monitoring the short movements of the commodity, index, or asset. In the case of binary sections, you need to make your call soon; in some cases, it might be less than a minute.
Most of the trading considering the binary options is happening online through digital platforms. If you want to start trading, you need to add a little amount to your account and an extra amount to buy the asset, index, etc. The minimum amount will change according to the platform you are dealing with.
Once you place a trade, you cannot withdraw, and yo0ur money is locked depending on the period of the contract. Therefore, you need to confirm the initial sum you deposited and a record of profit or loss during the trading; it is necessary to map down an effective strategy during trading.
Are Binary Options Legal In New Zealand Or Not?
Yes, binary options are completely legal in New Zealand, but the Government has a set of certain regulations that the trader needs to follow while trading. Here is a detailed description of the updated regulations and legalities issued by the Government of New Zealand to their citizens.
Different Types Of Binary Options
Before discussing the regulations about how to trade in binary options, the government has mentioned the different types of binary options the citizens of New Zealand can trade-in. The types are as follows:
- High and Low: You as a trader need to understand the highs and lows of the trading market. When the expiration happens, you need to predict whether the price will go higher or lower than the strike price.
- One-Touch Option: You need to predict whether the price will hit the target higher or lower than the strike price in the one-touch option. If the target is hit even once before the contract expires, you will earn a profit. If your prediction is wrong, you will end up losing money.
- Range Option: In the case of the range option, you need to fix upon a price at which you want to sell your asset in the market before the contract expires. If the selling price stays in your umbrella, you will get a fixed payout. If the price is outside your predicted umbrella, you will lose the money.
Here is a video guide about how to trade in binary options.
Things To Look-Out For
The money-making process in the binary options might seem simple, but it is more complex than you think. With the help of tutorials, many online platforms are seen to educate the new traders, but trading in binary options is also difficult for an advanced trader. As a result, you can end up losing huge investments.
The options that offer huge payouts usually have a really low chance of making profits, as it is structured so that most people end up losing money. Some platforms are even seen to refuse to credit the amount into the customer’s account. Nevertheless, it is highly popular with foreign traders.
There is a huge chance that you can encounter fraud while investing in binary options. These platforms are also quite popular in doing identity theft. Do not worry; these risks can be minimized if you follow the regulations.
Regulations To Reduce Risk
Since fraud is commonly seen while trading in binary options, the New Zealand Government has prepared a list of regulations to reduce risk. The Regulations that need to follow are:
- First, the provider should have a license issued by the Government of New Zealand. The license is only provided to the providers who meet the minimum standards set by the law.
- Second, be very careful while sharing your details like driver’s license, credit card details, etc., especially if you are dealing with someone overseas. It can subject you to the risk of identity theft.
- Third, be very careful of the tools or software provided by brokers for easy money. No software can predict the exact working of the market.
- Finally, do your research if you want to move forward with investing in a business outside New Zealand. It is highly possible that you will not recover the money you invested in the business.
Do Not Invest Through Offshore, Online Business
If you are a New Zealand citizen thinking of investing, do not invest through offshore, online business. Here are the pointers you should look out for:
- First, the businesses or brokers based outside New Zealand and are not licensed by The New Zealand Government are hard to map out by the FMA. The contract or investigation cannot start if the FMA has nothing to start with for catching the fraud.
- Second, the FMA cannot recover your money if you lose it in overseas fraud.
- If you think of investing in the business overseas without an office in NZ, you need to do your homework before handing out the money. If it turns out to be fraud, the FMA will not help you recover your money.
- Third, be very careful with the imposter websites, and it is really popular in the scam market. They can steal the name, logo and even hijack the actual website used by the company.
Here is the link to decoding an imposter website.
Using A Licensed Or Registered Financial Service Provider
This is a major regulation that the citizens of NZ need to follow. Using a licensed or registered financial services provider will help you retain your money with the help of FMA in case of fraud. Here are some points you need to look for:
- The legit financial service providers are asked to register on the Financial Service Provider Register ( FSPR ). You can find them here.
- If you want to register in the FSPR, you need to provide a permanent address in the country.
- If the financial provider deals in retail trading, they must be registered with a third-party dispute resolution scheme.
- If anything goes wrong, or you feel you have been scammed, you can provide the details of the third-party dispute solution scheme the financial provider is a member of.
- In some particular types of investments, the financial provider is supposed to be licensed by the FMA.
- Even if the financial provider is registered with the government, they can still do wrong.
Frequently Asked Questions
What Is The Best Binary Options Trading Advice?
The best binary options trading advice is to look for all the required certifications in your broker. Then, once the broker is decided, keep an eye on all the financial developments happening in the trading market. Finally, select a specific budget for trading and stick to a schedule.
Are Binary Options Gambling?
No, binary options are not associated with gambling. Unfortunately, many people have misconceptions about binary options. It is just that the security level of binary options is not as strong as it is in the USA. Also, due to shorter frames of time, predictions cannot be made easily, and people lose money.
If you are living in New Zealand and thinking of trading in binary options, you need to consider all the above regulations provided by the NZ Government for your safety. Also, keep an eye on the license possessed by the broker of your choice for safe investing.
If you are new, you need to start looking for patterns on the chart regularly consciously. You can start experimenting with your pattern mapping skills on Quotex by signing up and practicing investing without losing any money.
Trading is a complex domain, and it takes years and years of practice to understand the market. Still, the trading market is highly subjective and is subjected to various risks, but you can certainly minimize them by taking calculated risks and finding a balance.